Intrapreneurship: How to
Drive Innovation by Getting Out of the Way!
Cincom Systems is a privately held software company founded in 1968. We specialize in providing software, services, and hosting to help simplify and manage complex business processes. Cincom competes with companies like Oracle, SAP, Siebel and others.
Thanks to Cincom’s significant and long-term success, we are often asked how do we, as a medium-sized, privately held company, so effectively compete with and then consistently win against the larger, publicly held companies. Of course, there are many ways to compete. But, I’m only going to focus on one that has the unique ability to multiply successful business efforts rapidly, efficiently and effectively.
In an influential 1985 book, still relevant today, Gifford Pinchot III coined the phrase “intrapreneurship” to describe the marriage of an entrepreneurial spirit – complete with its fierce independence and lack of deference to established views and the strictures of conventional wisdom – with the resources of a large corporation. While these two spirits may seem in conflict, they actually thrive in many of the world’s best-run companies.
Intrapreneurship is a strategy for stimulating innovation by making better use of entrepreneurial talent. When effectively promoted and channeled, intrapreneurship not only fosters innovation, it also helps employees with good ideas to better channel the resources of a corporation to develop more successful products.
Some of the greatest business leaders of the past century made their early mark in business as intrapreneurs. Former General Electric chairman Jack Welch made a name for himself by building GE’s engineering plastics business as if he were starting his own company. Lew Lehr, former chairman of 3M, similarly built his career on his intrapreneurial pursuit of 3M’s expansion into the healthcare industry. Both General Electric and 3M are long-time Cincom customers, and both are very successful.
Cincom fosters an intrapreneur ethic within our company. The result is many of our associates are empowered and enabled to become company “change agents” who are comfortable bringing new ideas forward and promoting their execution.
Cincom has created an elevating and encouraging environment that provides its talented and entrepreneurially minded people the freedom to innovate, and follows that up by supporting them with the resources to quickly bring their innovations to market. For firms like ours, innovation and speed-to-market are two ways to compete successfully against large, publicly held companies. Creating, fostering and sustaining the right environment really is an intrapreneurial imperative.
Intrapreneurship in Action
Cincom has supported, with economic and technical resources, expedited decision-making processes. And we have been willing to break with our traditions. Cincom has supported several initiatives that could easily have been quashed because they ran counter to the way the company had done things in the past, or they led Cincom rapidly into new businesses that were not yet really on our radar screen.
Despite a long background in working for software developers and large telecommunications firms, one of our staff brokered the marriage between Cincom’s technology and customer base and the growing need to reduce the cost of customer service to create an outsource call center business.
I gave this vision my personal support by traveling to India to promote the opening of our call center business there. We then applied this model in the United States by partnering with several large U.S. companies that leverage Cincom’s global IT expertise. Five years ago, we were not a player in the call center services industry. Today, call center services is a rapidly growing business for Cincom.
By allowing us to tap and leverage Cincom’s brand, resources, technology and customers, Cincom – within five years – now operates 2,000 call center agent “seats” worldwide. We expect this to grow to 5,000 seats in the near future.
In such ways, we continue to find new means to leverage our resources to create new business opportunities. During our fiscal first quarter 2005, we landed a three-year, $36 million business process services deal with an overseas telecommunications company in another business pursuit which is completely new for Cincom.
In 2001, Cincom Systems hired an entrepreneurial technology veteran as a Marketing Director for our OverC call center product offerings. Soon after, he spotted an opportunity to acquire Synchrony, a firm with best-in-class CRM technology and an incredible roster of talented developers. This opportunity would supply our company with immense new product offering potential along with a vehicle for infusion of entrepreneurial energy in another new business endeavor.
Synchrony’s parent company had run into financial difficulty, and we were convinced that we should mobilize to seize the opportunity provided. We acquired the company, which quickly is becoming a successful venture. It also brought Cincom an established technology we otherwise would have incurred substantial costs and many years to develop ourselves.
Creating an Intrapreneurial Culture
As someone who founded Cincom with “$600 and a card table,” I will always be at heart an entrepreneur. So, I could never even imagine allowing us to become a company that doesn’t support creative free spirits who also seek to pursue good opportunities, and in the process build new businesses within Cincom.
However, Cincom is in many respects also a conservative company. We don’t take reckless risks and all initiatives require a solid business case. For intrapreneurship to work effectively, several important considerations should be taken into account that balance risk with reward, and opportunity with difficulty.
Listen – Always Listen
Cincom recruits team members, in part, because of their entrepreneurial spirit. Intrapreneurs above all else thrive on the freedom which fuels their innate desire to innovate. This can be a handful for a manager who doesn’t understand or respect the entrepreneurial nature.
For intrapreneurship to flourish in an organization, leadership has to be willing to listen to and recognize good ideas whenever and from whomever they arise. This message must be constantly reinforced from the highest levels of the organization.
The key is creating an environment where an employee’s ideas, when properly presented, are taken seriously and then be properly supported and recognized.
One never knows where good ideas will come from, especially in a corporate culture that supports intrapreneurship. An account representative could become the catalyst for revolutionizing a company’s entire business strategy when presented with the ongoing opportunity to approach company leadership with a proposal.
Beyond listening, it is critical to enable people to see their own ideas through, even if they must cross over into a new functional area and push themselves past any previous company achievements or organizational structure.
Cut the Red Tape
Cincom has created an environment where anyone can come forward with an idea on how to improve any aspect of our business. We do not care where that person fits on our organizational chart. If the idea is good, and the benefits and risks are clearly stated, that idea will get the green light—and the support it merits.
Although Cincom has a business approval process, it’s efficient. Projects that deserve our support are quickly expedited. Back in 1999, for example, when it was proposed to develop a call center business, it was not necessary to wade through a lengthy buy-in process that could have taken months and perhaps missed a window of opportunity.
Companies can foster and encourage potential intrapreneurs by sending the message throughout the organization that a case properly presented, which thinks through the issues, identifies and explains what can go wrong, what can go right, and how to put contingencies in place. But, the process must be simple and flexible enough to move quickly—and then to later scale up rapidly when success develops.
Freedom to Fail
Many entrepreneurial careers are built on a succession of minor failures, with the accumulated lessons learned from each leading to ultimate success. It is important for companies to allow for a degree of inevitable failure around new projects and initiatives without sending the message that failure is not tolerated.
Cincom provides a “freedom to fail” culture and environment. Although failure resulting from poor planning and execution is not accepted, there is no penalty for those who come forward with good ideas, assuming they’ve been well presented and competently executed.
An intrapreneurial culture must embrace constructive failure to score big victories. Many companies are filled with reliable “singles hitters” who play it safe and never really aspire to greatness. Intrapreneurs, on the other hand, swing for the fences. Sometimes they strike out, but when they connect they like to hit it big.
Harry Truman once said, "It is amazing what you can accomplish if you do not care who gets the credit."
It doesn’t do any good to encourage team members at all levels to bring innovative ideas to company leadership if the leaders then take those ideas and make them their own. Recognition is a key driver for us all. Leaders who seek to steal the recognition rightfully deserved by others find few followers.
So, one needs to make sure credit goes where it is due, and to share it widely. It costs nothing to admit that the $20 million idea came from the receptionist. No one is diminished as a result, and the company is $20 million richer for it. The receptionist becomes then even more eager to offer better future ideas. And, everyone else in the organization is encouraged to follow the lead of that receptionist, and to help to improve the organization. “Leaders deal in hope,” as Napoleon noted. But in top performing organizations, “Leadership is always plural.”
Be Willing to Break Precedent
Every organization must have processes and rules of procedure and behavior. But when we catch ourselves saying, “We’ve never done it that way before,” or “That’s not how we do things,” we should stop and reflect on whether we are saying this out of habit, or for good reason. Chances are we may be citing a rule that may no longer be appropriate for the new conditions and situations we are now trying to intrapreneurially develop. Maybe it’s best, and even necessary, to sometimes break with past traditions and establish new precedents to respond to new opportunities. The ability to differentiate between rules needed to guide and perform within the current business and rules which may restrict success in building a new business is what discernment and opportunity awareness are all about. Going forward is always a journey. And as journeys progress we need new signposts along the way which point the way forward on the next leg of our trip. These signposts are the rules and regulations for building new businesses within existing businesses.
When we began supporting the call center model, one requirement to get it off the ground was that Cincom had to be willing to reduce its upfront charges in order to attract business. This meant accepting creative payment terms that ran counter to the way we structure our software agreements. We did so because we became convinced that this was necessary to help this new business to successfully get off the ground. As a result, we also needed to take the risks out of the way we recognized the revenues, even as we provided new ways of billing for services.
When the green light flashed to “go for” the acquisition of Synchrony, we decided to also integrate the Synchrony product with our own existing call center products. This integration would not only provide a much richer, deeper product offering, but also accelerate our speed-to-market for a full range solution, and provide a pathway forward for former customers. Journeys require maps and itineraries; but sometimes we also need to take detours and alternative routes when unusual or unexpected opportunities and situations develop, as almost always happens.
To start a revolution of initiative and innovation, ignite the intrapreneurs and then get out of the way! Lift off generates a lot of heat.
Get out of the way!
Tom Nies is the longest active-serving CEO in the computer industry, recognized with Bill Gates and Steve Jobs as one of the "pioneers of the software industry" by the Smithsonian Institute, and acknowledged by President Ronald Reagan in 1984 as "the epitome of the entrepreneurial spirit of American business." Cincom has generated over $100 million in revenue for 20 straight years, a feat unparalleled except for one other in the software publishing industry ... Microsoft. Tom has been named Best International Executive, along with the CEO of Adobe, at the 2005 Stevie Awards, "the business world's own Oscars," according to the New York Post, has been honored by Prime Minster Heath in 1992 for bringing the software industry to England, has been inducted into Ernst & Young's Entrepreneur of the Year Hall of Fame in 2004.
Wow! What a track record of inspiring accomplishments based on very mindful and empowering principles! You have to love it when the "good guys" win big! (ed.)
Many more articles in Creativity & Innovation in The CEO Refresher Archives